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Refinancing My Mortgage
Jared Dreyer, President Dreyer Group Mortgage Brokers
VERICO
On When to Refinance
When is it appropriate to Refinance Your Mortgage?
If your current interest rate is higher than 3.25%
If your current interest rate is variable Prime -.80 or less
If you have high interest rate debt outside your mortgage - credit cards, lines of credit
To purchase a rental or investment property (as long as it is approached as a long term
Jared: Let's talk about refinancing your mortgage. That's one of the things we talked about - when
it's appropriate to refinance your mortgage, as Stacy had mentioned. You know, it is of
course, if your interest rate is higher, it's always worth calculating your penalty. You
know you'll get a quote on your penalty.
You can see if it's worthwhile, depending on your equity position. If you incorporate
that either through refinance, have that penalty incorporated in and look at that lower payments
for you and going to a different payment schedule to pay it off faster. We look at that and
analyze it for you and see if it's worthwhile.
If your current interest rate is a variable rate, what we're trying to go and even if
you have a good, variable rate. If you have less than two years on that variable rate
term, then you have to start thinking about two or three years out. Okay? Because we only
have one way to go. We do not want to go lower into interest rates.
Harrison says well why not? Why don't we want to go lower on interest rates? Because the
lower we go on interest rates, the worse the world is doing. You know, the economy is not
doing well with low interest rates. You need to have some sort of a bump in increase in
interest rates because that means, basically, employment and jobs are working.
Because going back to the previous slide in 2007, that was when prime was at its highest
at 6.25%, and that was just before the financial crash. And that was when everything was gangbusters.
The entire world was doing very well.
And so we need that to happen again to get people back - because unemployment is really
the key thing. That's what my own personal opinion is. If you want to look they way you
were.. rates economies are, look at what the unemployment rate is, because if people have
jobs then they'll make their mortgage payments. If they don't have jobs, then they're not
making mortgage payments. That's why Europe's a disaster. But that's a side topic - we won't
The other reason of course we talk about consolidating high interest rate credit card debts, payments
for you. The other thing is if you want to purchase an investment property, and there
are ways if you have good equity that you can actually take secure lines of credit out
to buy a rental property that can be a tax savings for you. You definitely want to talk
to your chartered accountant about that to make sure that's viable for you, that those
options for you.
One big thing we're doing a lot of right now is home renovations. A lot of people are staying
put in their homes, so what they're doing is, theyĆre either refinancing - I'm sorry,
taking equity out of their home, or they're doing a secure line of credit as a portion
or a combination of either-or. And basically they're improving the value of their home.
So they say, we're going to stay put here now for the next five to ten years, so what
we're going to do is, we're going to redo the kitchens, the bathrooms, the roofs, the
windows. So those types of things, they're going to add value to your home and they make
sense for your refinancing because you're going to increase what you're going to sell
it for on down the road if you redo it.
And of course the next ones. This last one, we don't do a lot of that. I think you have
to, if you're borrowing money out of your home and you're going to be investing it in
the stock market or a mutual fund market, be very, very cautious. Make sure you're working
with an accountant or CAA, and make sure of that financial planner's track record, if
they've convinced you to do it.
I've seen so many people get hurt on these tax deductible mortgage plans that have backfired.
And we all know how the stock market is up and down, and it's very - so just be cautious
on those tax deductible mortgage plans, all right? Be very cautious on that.
Accessing Equity - Product Options Straight line of credit (we can go up to 75%)
Blend a Line of Credit with Fixed Rate Mortgage (Up to 80% loan to value)
Straight Equity Take out - all new mortgage 2nd Mortgage (behind your existing mortgage)
So straight line of credit, we can go up to 75% of the value of your property. That's
the maximum we can do it. Banks do 65%. We do have some credit unions that will go to
75% of the value of your property. You can do the blends that we just talked about, up
to 80%.
And you can do a straight equity takeout. And that means refinancing your home, that
again is up to an 80% value of your home so whatever your property is worth, it's up to
80%. And of course you can do second mortgages as well, depending on qualifications behind
that for you.
Call Now to Save on Your Mortgage Dreyer Group Mortgage Brokers
VERICO 1 (800) 687-9020
1 (604) 669-6006 www.dreyergroup.ca